Still Friday Day 8

We visited Kingway Beer, a "joint venture" with Heineken here in Xi'an. We took a tour of a sort of museum of beer, discussing the history, as well as the methods of making, and the different types. We then saw a very large and impressive bottling facility. The number of beer manufacturers in China was on the rise until the early 90's, when the government installed stricter regulations on the process, thus making the product safer. Larger companies thrived, and the smaller, and more risky product manufacturers went away. Just like in the U. S., China makes use of regulation to improve standard of living by protecting the people from unsafe products. Not perfect, but progress is being made. We then had a great dumpling dinner, and then a visit to the largest water/music show in the world. The next morning (Saturday) we took a bike ride on the City Wall in Xi'an. The City Wall is the only wall in China to be completely standing, and surrounds the area of Xi'an known as the inner city. Tunnels all around the wall provide easy access. We witnessed from up on the wall several weddings in the area, which are celebrated by fireworks, dinner and dance. We then visited a market near the Bell Tower at The City Wall, and bought more stuff. It was there that I realized how clean the entire city is, even in the poorer areas. I also noted how friendly the merchants were, even when haggling for price. I think Xi'an is a beautiful city, and one that I would love to have the opportunity to return to. Then it was a full day of travel to Vietnam on Saturday afternoon.

Chinese Culture

The difference was noticeable - if you greet Chinese people with the traditional greeting (handing business cards with two hands, exchanging money with two hands, bowing, etc.) and make an attempt to speak their language, you will be almost immediately and very warmly accepted. Also, even in the market where some "tough negotiating" took place, there was a sense of respect and levity in the process. Why is this important? Trust is the entrance fee to building strong business relationships, so once step one is complete, this leaves steps two and three in relationship building much easier and more secure. I also noticed that our hosts at the convention center were highly sensitized to our interest in a greener world. They went out of thier way to describe the use of recycled materials in the construction, as well as methods for reducing the carbon footprint.

China Day 7, I think

We had a busy Friday in Xi’an, which here is called the birthplace of China. In the morning, we went to the Hongdao Art Museum where we viewed the history of China through artwork. We viewed each dynasty through the artwork of each period, and then had an opportunity to purchase some artwork from local artists. We all remembered to step over the thresholds (some as high as a foot) that cross every door – men go left foot over first, women right foot over first. This tradition is said to keep away evil spirits (who do not have knees, you see…) from entering any doorway. We learned that water colors are a reflection of Taoism, that is, nature is great, and people should be humble. After, we went to the Xi’an Qujiang New District Conference and Exhibit Center. This entire center was built to house trade shows, conferences, etc. and is only a few years old. We saw a floor model of the entire development area of Xi’an (which by the way directly translates to mean “western peace”), which was very impressive as it took up a large part of the floor. It showed the parks, cultural centers, and many tourist areas that focus on the Tang dynasty. We then went to the Xi’an Hi-Tech Industries Development Zone where we saw another floor model, this one gigantic, with lights, movement, etc. It is clear that this city is one that China has invested heavily in. As you drive through and around the city, cranes are everywhere. Building is going on everywhere. This city of 7 million people is growing quickly. It is considered a tier two city, but I believe it has a chance to rival Beijing in attracting tourists and business because it is a very livable city. Also, there is much talk about indigenous innovation – that is innovation by Chinese, for Chinese and the world. China wants to stop making things, and start innovating things. According to The Economist, more companies are turning to “frugal innovation” which our Johnson and Johnson host referred to. This is the “de-featuring” of products in order to make them more affordable to more people. Tata motors did this with the car that now can cost less than $3000 U. S. D. This tech center was a demonstration of how serious China is about shifting their economy to a more innovative one. Italian dinner, then cool Jazz with Clifford at the instruments and Trebecca at the microphone.

Quotable Quotes - watch for more...

"It is like this", "it is amazing" and "it is crazy" .. Pierre from Carrefour when describing the growth in China

"Use your horn, not your brake" - Adriana instructing Dinesh on how to drive in China (street signs, road markers, painted lines are all just "suggestions")

"The class of 2010 is the best EMBA class to travel with" - Paul Benchener - Director of the Rider EMBA program - Yes!!

"It doesn't matter how big the suitcase is, you'll always fill it" - Bradley C. LaLonde - Partner and Co-Founder of Vietnam Partners LLC on investment in Vietnam

Other Observations in China

After observing some of the "touristy" things we did, blended with the discussions we had with agencies and businesses here, several things are apparent. China wishes to share its long history and culture with the world. However, talk to the people specifically, and they are very open about the problems and mistakes made under communist rule. Still, after seeing the Great Wall, the Beijing Wall, and the Xian City Wall, they appear to be attempting to hold the history of these walls, while breaking them down through a society that is more and more open in terms of moving to a market driven system. Also, while here, another suicide (11 in total) at Apple supplier Foxconn occurred. The state reports that the suicide rate for the percent of workers at Foxconn is one fifth the national number. The media is raising questions about the factory culture here in China, with the workplace dorms and young workers hundreds, even thousands of miles from family.

One other observation - while the people are in a high context society, they are still very individualistic and even more forward or aggressive than most would think. Just walk the market, try to stand in a line for anything, or try to cross the street and it becomes clear that they look out for number one. Still, i find in general that customs of tact and respect still exist. These customs, including handing cards, money, passport, gifts and other things with two hands to the other person, or bowing to someone as you are greeted are responded to with great pleasure by our Chinese hosts.

Robby is our new guide and will take us to several points of interest today. Lots written about "Indigenous Innovation, which will go on my next posting...

China Days 5 and 6 - A lot of culture!

Great Acrobatics show Tuesday Evening - some amazing video below. Wednesday we paid a cultural visit to Tienanmen Square and the Forbidden City in Beijing. Then we went to the market and purchased some goods. The Pearl Street Market is capitalism on steroids. Merchants push their wares, shirts, jewelry, toys, you name it. Nothing has a price tag. They tell you a price on a calculator, in Yuan, and you put your price on the calculator as a negotiation. Supply, demand, behavioural economics, utility, all of the economic theories are tested in each transaction. In one, I made an offer, and was turned down, so I walked away. I came back a half hour later and offered the same price. The saleswoman said "don't you think I would have taken that offer when you said it the first time. why do you think I would take it now"? These merchants are real merchants who know how to sell, and maximize profit.

The forbidden city was amazing - over 500 years old, housing emperors until the early 1900's. Tienanmen Square is a fascinating place - home of the central government of China, and the mausoleum of Chairman Mao.

We ended the night at the Ritz Carlton, where we listened to Clifford play Jazz and Blues...

Today we flew from Beijing to Xian, and saw the eighth wonder of the world, the Terra Cotta Warriors. Made to protect Emperor Qin Shi Huang over 2200 years ago, these large figures were made by over 720,000 slaves and buried with Qin to protect him in the after life. Discovered in 1974, this find would represent one of the most significant archaeological finds in history. The pictures tell all. Each figure represents an actual warrior who lived during Qin's time. We then saw a show which depicted traditional dance and music from the Tang dynasty circa 618 AD - 907 AD. All very fascinating. More to come... pics are latest from recent adventures..

China Day 4 - U. S Chamber of Commerce, and Carrefour

Today we visited the U. S. Amcham - AMerican Chamber of Commerce here in Beijing. We learned quite a bit about the business climate for American companies doing business here in China. Ancham helps companies through networking, providing information and access, as well as provides advocacy to U. S. companies. There are many challenges facing companies attmepting to do business in China, the largest being the protection of intellectual property. Other issues are inconsistent interpretations of governmantal regulations and human resource management including retaining employees and finding skilled managers. Competition from Chinese comopanies is growing at a fast pace making it more and more difficult for entrants from other countries to succeed. Interestingly, many foreign companies are hiring more women than men becuase of a work ethic gap between the two genders. The Chinese culturally and hitorically work in silos, and do not work in teams, like those in the U. S. There have been many changes in the past 30 years here, and the landscape will drastically change over the next 30 as well. One large dilemma are the 700 million or so people that live on very modest salary living in the rural villages outside of the large cities, and in the countryside. There is an extremely widening gap between rich and poor here in China, even though so many people have been pulled out of poverty.

Our Carrefour visit with "Pierre", the store manager of one of about 16 stores in Beijing was also enlightining. Pierre is a "resident Ex-patriot" from France, and has worked in China for 13 years. He is possibly one of the smartest "store managers" I have ever met. He knows about his business, and the businesses of his 50 or so competitors, each of which have multiple locations throughout Beijing, and China, including Wal Mart which has about 7 stores around Beijing. Pierre told us all about the diffuculties in hiring and retaining help, the theft problem, and the lack of supply chain that Carrefour has, which he claims actually makes them more nible than someone like a Wal Mart (we'll see about that..)..The store has about 8 million transactions per year, and during Chinese new year, January and February make up 25% of the store's yearly sales.

Got to run - off to the next visit - more later..

May 24th - L'Oreal and J n J

Great trip to two of the most important consumer products brands in the world. What we learned about China is: Development in tier 2 and 3 areas is a high priority, China has a head start on the U S in regards to health care reform, Innovation, R&D, Channel Management, acquisition of local companies and licensing agreements are all key strategies. China has an aging population problem like the U S, and the tax base from this demographic will likely cause future problems.. Products must be "de-featured" when entering tier two and three markets (poorer and more rural markets, not the major capital cities in China). Beijing is a beautiful city - spotless - 16 million people and much larger in square meters than most world cities. Of course, after dinner, there was much discussion about many important issues - and we all got to speak our mind - I bought a fabulous Ralph Lauren shirt that everyone loved, well almost everyone, well, really nobody did, but it was $11 US... pic forthcoming...

Day 2 - The Great Wall

Cultural trip to theGreat Wall, the Ming Tombs and a drive by of the Olympic Park area, including the "Bird's Nest", culminating in a dinner of Peking Duck. One cannot be amazed by the senseof history and pride in this country. Our tour guide, Tiger, a 36 year old man who lives in the area, gave the rider group a lesson in culture and history of the local area, as well as China itself. He is very proud of its history, but recognizes the mis steps that the government has taken over the years. He believe China is on the right path now, as they move more people out of poverty, and move up the standard of living. Still problems exist, as in any society. The Great Wall is beautiful, and gives a sense of the awesome task that was taken hundreds of years ago to erect this 4000 mile wall. Today, its on to J and J, and L'Oreal.

We are finally in China...

I am here and trying to get all my electonics right. We have been traveling 24 hours and are finally back in the hotel room. We wake up tomorrow AM and head to the Great Wall. Should be fin and interesting. We did celebrate tonight with three bottles of vina - now I am getting all the electronics all set up - skype works, as does my blackberry. This blog works, and I have some fun vids up there, or go to mallonserv and find them in youtube...cheers Now I ave to get some sleep...

Day Before China

It's the day before I leave for China, and I just realized that Google departed China several months ago, which means that I may or may not have access to my google account, or even my you tube account. I will may have to wait until I reach Vietnam before I can upload everything...Oh well - all starts with the best of intentions. There's always email....